Operatingleasesareapopularchoiceamongbusinesseslookingtoleasevehiclesfortheiremployees.Thistypeofleaseoffersflexibility,withtheoptiontoupgradetoanewvehicleattheendoftheleaseterm.OneofthemajorbenefitsofanoperatingleaseisthepotentialtaxsavingsthatcanbeachievedthroughFringeBenefitsTax(FBT)benefits.
FBTisataxthatemployerspayoncertainbenefitstheyprovidetotheiremployees,includingvehicleleasing.Whenitcomestooperatingleases,theFBTliabilityisgenerallylowercomparedtoowningavehicleoutrightorusingafinancelease.Thisisbecausethetaxablevalueofthebenefitisbasedontheleasepayments,ratherthanthevalueofthevehicle.Thiscanresultinsignificanttaxsavingsforbusinesses,makingoperatingleasesanattractiveoptionforcompanieslookingtoprovidevehiclestotheiremployees.
Wherethissortofleasetrulyshinesisifyou’rekeenonanElectricVehicle(EV)orPlug-inHybridElectricVehicle(PHEV),becausethoseFBTsavingsaddup.TheAustraliangovernmentofferstaxbreaksandincentivesforbusinessesthatuseenvironmentallyfriendlyvehicles,suchasEVsandPHEVs.BychoosinganEVorPHEVthroughanoperatinglease,businessescantakeadvantageofthesetaxbenefitsandreducetheiroveralltaxliability.
Inadditiontotaxbenefits,operatingleasesalsoofferotheradvantagesforbusinesses.Theseincludefixedmonthlypayments,reducedmaintenancecosts,andtheabilitytoupgradetoanewvehicleattheendoftheleaseterm.Thiscanhelpbusinessestobettermanagetheircashflowandbudget,whilealsoensuringthattheiremployeeshaveaccesstoreliableandsafevehicles.
However,it’simportanttonotethattaxbreaksareonlyusefulifyouusethem.Inordertomaximizethebenefitsofanoperatinglease,businessesneedtocarefullyconsidertheirleasingoptionsandchooseavehiclethatalignswiththeirneedsandgoals.ByselectinganEVorPHEV,businessescannotonlysaveonFBTcosts,butalsocontributetoamoresustainableandenvironmentallyfriendlyfuture.
Inconclusion,operatingleasescanbeasmartchoiceforbusinesseslookingtoleasevehiclesfortheiremployees.WiththepotentialfortaxsavingsthroughFBTbenefits,aswellasotheradvantagessuchasfixedmonthlypaymentsandreducedmaintenancecosts,operatingleasesofferaflexibleandcost-effectivesolutionforbusinessesofallsizes.BychoosinganEVorPHEVthroughanoperatinglease,businessescantakeadvantageoftaxbreaksandincentives,whilealsopromotingsustainabilityandreducingtheircarbonfootprint.Whetheryou’reasmallbusinessoralargecorporation,anoperatingleasecouldbetherightchoiceforyouRVehicleleasingneeds.